Compromise & Settlement Agreements

Compromise Agreements are now called Settlement Agreements. These are legally-binding agreements which bring the contract of employment to an end, usually with the employer paying a sum of money in return for the employee waiving various rights and promising not to bring claims against the employer. Whether you’re making redundancies or are using a settlement agreement to resolve a workplace dispute, you can count on our expert employment law solicitors to protect your interests and secure a fair deal.

Why choose Chattertons for compromise & settlement agreements?

Here at Chattertons, our specialist employment law solicitors have been providing strategic advice and practical assistance to businesses across the UK for over 100 years. During this time, changes to employment legislation have come thick and fast with policies edited and updated on a regular basis. Keeping abreast of these changes is crucial in keeping the workforce satisfied and minimising the risk of a claim against your company. That’s why our dedicated employment team work with employers to negotiate and draft the terms of a settlement agreement. We understand that this can be a particularly challenging task, and determining an appropriate amount to offer as payment is not always straightforward. In order to draft an agreement that is legally watertight and in line with both your employee’s rights and your commercial interests, it’s essential to gain advice from an expert in this field.

Chattertons Solicitors are equipped with the experience necessary to guide you through the process with ease, reducing the risk of a costly court-battle and keeping matters clear and confidential.

What is a settlement agreement?

A settlement agreement is a legally binding agreement between you and your employee. This is used to make a severance payment when you wish to terminate their employment in return for their agreement not to pursue an unfair dismissal claim in Court. They can also be used to resolve workplace disputes that do not result in termination of employment, such as those regarding holiday pay. The benefit of using a settlement agreement is that it allows you to bring a challenging situation to an end quickly and discretely, whether it’s a redundancy or a dispute.

How much compensation should I offer my employee in a settlement agreement?

When drafting a settlement agreement, you must state a full breakdown of the payment amounts due to your employee. The amount you pay will usually be based on financial losses, and this will vary depending on the unique circumstances surrounding the terms of their employment. For instance, if your employee is owed a bonus or commission, this should be included in the total amount. You may also have a contractual obligation to pay company pension contributions, and our solicitors can advise as to whether this should be paid directly into their pension as part of the settlement.

Our specialist employment solicitors can assist you in the drafting of the agreement and ensure that a fair financial settlement is being offered that reflects the circumstances. In order to determine the amount, we will assess whether or not your employee would have a strong claim against you if they were to bring their case before an Employment Tribunal. We will then calculate how much they might receive if they were to proceed with their claim, and this will aid us in deciding an appropriate amount. If your employee’s solicitor advises that the amount offered is insufficient, we will negotiate a new offer on your behalf, ensuring that the final sum is not unrealistically high.

What if my employee refuses to sign a settlement agreement?

If your employee’s solicitor advises your employee that the amount offered in the settlement agreement is insufficient and refuses to sign the document, you can rely on our employment solicitors to negotiate a fair deal on your behalf. If your employee still refuses a counter offer and wishes to proceed with their claim through an Employment Tribunal, rest assured that our team will be on hand to protect your interests through robust representation.

Our solicitors take immense pride in assisting our commercial clients who are under significant stress due to workplace disputes or dismissals. Terminating a contract of employment is rarely easy, but with our expertise and skilled negotiation, you can relax knowing that the process is being managed correctly and fairly.

For more information and advice on settlement and compromise agreements, make an appointment with our specialist team of employment solicitors today via phone or our short enquiry form.